The government's attempts to diversify the agriculture sector and move up the global value chain have been seriously constrained by poor infrastructure, an inadequately trained work force and a weak business climate. In order to help companies, adopt innovative practices and technologies, the National Export Strategy adopted in 2013 affords companies greater access to the outcome of international research and better information about available technologies; it also helps companies to obtain grants to invest in such technologies from sources such as the country's Export Development Fund and the Malawi Innovation Challenge Fund. In parallel, the government has raised its investment in research and development to 1% of GDP.
Food and beverages
Most fruits and vegetables are exported raw, while processed food is imported mainly from South Africa. Carlsberg opened its first brewery outside of Denmark in Blantyre in 1965. The brewery also bottles Coca-Cola products under licence. A mango processing plant for the export of fruit concentrate opened in Salima in 2013. Universal Industries operates several food factories in Blantyre, where it produces sweets, crisps, biscuits, milk powder, soy products and baby food. Coffee and tea are processed by half a dozen of different companies in the regions of Thyolo, Mulanje and around Mzuzu.
Pharmaceutical companies
Malawi has four pharmaceutical companies. They manufacture a limited range of drugs, particularly those that are in great demand on the local market. These are Pharmanova Ltd. which is the biggest pharmaceutical manufacturer in Malawi, followed by SADM, Malawi Pharmacies (Pharmaceuticals Limited) and Kentam Products Limited.
Forestry
Large man-made pine tree forests are located in the Viphya Mountains, around Mulanje and Zomba. Timber production for building materials and furniture is an important industry for these regions. However, most areas in Malawi suffer from deforestation due to illegal logging for charcoal production and the use of firewood.
Electricity
Malawi's sole power supplier is the state-owned Electricity Supply Commission of Malawi (ESCOM), which generates almost all its power from hydroelectric plants along the Shire River. The installed is approximately 351MW. About 12% of the country's population has access to electricity, according to 2014 World Bank figures.
The country has been suffering from intermittent power outages as a result of an ongoing drought that has halved power output as water levels of the Shire river dropped significantly. The river usually generates 300MW of electricity, accounting for 98% of Malawi's total supply. However, the drought reduced that capacity to 160MW, according to ESCOM.
Services
The service sector accounts for 51.7% of Malawi's national GDP. Notable industries are tourism, retail, transport, education, health services, telecommunication and the banking sector. The Government of Malawi holds shares in many important companies, such as Malawian Airlines (51%) and Press Corporation Limited. Press Corporation Ltd. is the country's biggest company, with subsidiaries in the tobacco, banking, sugar, fishing, ethanol production, steel production, retail, telecommunication and petrol sectors.
International support
Malawi has undertaken economic structural adjustment programs supported by the World Bank (IBRD), the International Monetary Fund (IMF), and other donors since 1981. Broad reform objectives include stimulation of private sector activity and participation through the elimination of price controls and industrial licensing, liberalization of trade and foreign exchange, rationalization of taxes, privatization of state-owned enterprises, and civil service reform. Malawi qualified for Heavily Indebted Poor Country (HIPC) debt relief and is in the process of refining its poverty reduction strategy.
Malawi has bilateral trade agreements with its two major trading partners, South Africa and Zimbabwe, both of which allow duty-free entry of Malawian products into their countries. The government faces challenges such as the improvement of Malawi's educational and health facilities — particularly important because of the rising rates of HIV/AIDS — and environmental problems including deforestation, erosion, and overworked soils.
Former President Bingu wa Mutharika of Malawi spoke about the country's recent unilateral agricultural reforms at the World Economic Forum on Africa at the United Nations, September 2008.
Move towards economic independence
In 2006, in response to disastrously low agricultural harvests, Malawi, through an initiative by the late President Bingu Mutharika, an economist by profession, began a program of fertilizer subsidies that were designed to re-energize the land and boost crop production. It has been reported that this program, championed by the country's president, is radically improving Malawi's agriculture, and causing Malawi to become a net exporter of food to nearby countries.
Economic grievances though took a downward slide during Mutharika's second term. Economic grievances were a catalyst that resulted in the 2011 economic protests in Malawi in July.
